Is it possible the Federal Reserve might cut short-term interest rates as early as today?

It would be a surprising but not totally shocking in light of the weak economy and continuing slide in bond yields, several economists said.

"An easing is justified now. The manufacturing sector is in decline," said Lacy H. Hunt, chief economist for HKSB Securities, New York.

"There's a 45% chance we are already in recession or will be by the end of the year," he said. "By the end of the year the federal funds rate will be 5% and next year will go down to 4.5%." The rate is currently 6%.

"If I were voting, I would vote to cut rates tomorrow. But I expect them to wait until July or August," said Sung Won Sohn, chief economist at Norwest Corp.

"My guess is they will wait longer to see where the weakness in manufacturing takes us," said Robert G. Dederick, consulting economist to Northern Trust Co.

"I certainly wouldn't rule it out, but their inclination is to wait longer," said Philip Braverman, chief economist at DKB Securities Corp. "They have concerns about the dollar and fears the economy might come back more strongly than expected."

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